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17 May, 2013

Goliath triumphs over David - US Supreme Court upholds Monsanto's rights on their seeds

In true David vs Goliath fashion, Monsanto, a multinational biotechnology company, took on a farmer over the use of their patented soybean seed some 5 years ago. The legal saga has come further than anyone expected, reaching as far as the steps of the US Supreme Court late last year. The Court released its decision only some days ago, yielding an interesting, albeit not surprising result.

The case of Bowman v Monsanto Co concerned Mr. Bowman, having purchased and used Monsanto's gene manipulated seeds from a certified vendor, much like many of his peers. The seeds themselves were altered to be pesticide resistant, giving farmers the ability to plant their crops and protect them from the bug scourge that wreaks havoc amidst fields all over the world (scenario slightly exaggerated here). One caveat in the purchase of Monsanto's seed is that they can only be used for one planting cycle; that is that any seeds from the harvested crop cannot be used to plant another cycle and the farmer has to buy yet another batch, thus preventing the self-growing of plantable seeds by farmers, retaining Monsanto's monopoly over that particular seed. Mr. Bowman had fully complied with all terms set by the company in his operations, but wished to lower his costs and bought his seed from a grain elevator, ones meant for consumption and not planting. Some of these seeds contained the alteration patented by Monsanto, which Mr. Bowman used to then plant his subsequent crops once he has killed off the plants which weren't resistant to the pesticides. Once Monsanto discovered Mr. Bowman's actions, the company proceeded to sue him for patent infringement.

Terrifying - from a farmer's perspective

In their decision the Court was unanimous, showing a clear stance as to where the law stands today. In his argument Mr. Bowman relied on the doctrine of patent exhaustion. This effectively means that once a patented item has been legally sold, the person who's bought that particular item can sell or dispose of it as they wish, much like with any item they legally purchase. Once the patented item has been legally sold, the patent rights in that particular item end, or are exhausted, preventing the patent holder from controlling it post-purchase. Because the doctrine relates to a "particular article" the person who's bought the item has no right to make copies of that item - in this case creating new plantable seeds. There is no exhaustion if new copies are made, resulting in Mr. Bowman infringing Monsanto's patent. Having bought the seeds from a grain elevator didn't help his cause either, making his claim over exhaustion all the more dubious. As stated the appeal was unanimously dismissed.

You have to accept that the Supreme Court was perfectly right in their decision, and the unanimity further highlights this. As Justice Kagan stated in the Court's decision, should the exception have been accepted "...patents on seeds would retain little value." Clearly this would decimate any patents related to seeds, and once planted and used over and over, possibly even resold to other farmers, the patents would be completely worthless. The decision was one of common sense.

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The Author

Jani Ihalainen (LL.B. (Hons), LL.M.), is a law graduate with a passion for all that is intellectual property law, residing in London, UK.
He also currently works for an international law firm in the City of London.

The name of a company, much like the names of people, carries significant weight in the company's identity in the mind of the consumer a...

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